OPTIONS

Options


An option is a financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date). Options are extremely versatile and may be used to speculate on the movement of an index or security, or as a hedge to reduce the risk of holding a position. Options are sophisticated trading tools and can involve significant risk and are not suitable for all investors. Prior to buying or selling an option, an investor must receive a copy of “Characteristics and Risks of Standardized Options”. Investors must be approved by Spartan Capital to invest in options and not all investors obtain such approval. Please discuss option strategies with your Financial Advisor to determine if options may be a suitable investment for you.